I’d have trouble fitting that scenario into a violation of Kentucky’s extortion statute, KRS 514.080, online at https://casetext.com/statute/kentucky-revised-statutes/title-50-kentucky-penal-code/chapter-514-theft-and-related-offenses/section-514080-theft-by-extortion
They owe you the money, and you don’t owe them a reference.
I did once have former tenants call a year or two later to ask if we would be willing to take the eviction off their record since they were having trouble finding someone willing to rent to them. I reminded them they still owed thousands in unpaid rent and repairs to the unit.
As a landlord, I don’t have the power to expunge the civil court record anyway.
This is a blog post, not specific legal advice. No attorney-client relationship is intended or created.